WPP CEO: Targeting EPS Growth Of 10%-15% A Year

DUBLIN (Dow Jones)--WPP PLC (WPP.LN), the world's largest marketing company by revenue, said Tuesday the group has returned to its pre-crisis financial model of 10% to 15% a year earnings per share growth. WPP Chief Executive Martin Sorrell told an annual general meeting in Dublin: "In April and May, we've now gone back to the financial model we had before the crisis," with the operating margin up 0.5 percentage point each year. He also said the company will use free cash to repay debt and small to medium-sized acquisitions up to GBP100 million in 2009 and 2010, and expects revenue growth in line with the market at flat to 5%. He reiterated at the company's AGM that margins could do better than the current target of a one-percentage-point improvement to 12.7% in 2010. "We feel comfortable with margins in excess of that," he said. He told Dow Jones Newswires on the sides of the AGM: "None of our competitors are talking about increased margins this year." He said he is happy with most analysts' margin improvement forecast of one to 1.3 percentage points. "The first half of last year was extremely difficult," he said. "In the second half [of last year] we managed to get our costs along with our revenues. Having got it into balance we've now seen some growth." On whether euro-zone governments and the U.S. will address their deficits or continue with a stimulus strategy, he said: "Politicians are in business to be reelected... They are more likely to inflate their way out of the crisis." Sorrell also told the AGM that last year clients were extremely focused on costs, but added: "In 2010, there's more variability, more opportunity for expansion, but it's very much a world that is moving at different speeds." As reported earlier Tuesday, Sorrell said he expects like-for-like revenue growth of around 2% for the full year. "Things are going well, but I don't think we're overconfident," he said. -By Quentin Fottrell, Dow Jones Newswires; +353-1-676-2189; quentin.fottrell@dowjones.com (END) Dow Jones Newswires June 29, 2010 09:17 ET (13:17 GMT)